Rates must rise soon, says Bank of England

24 Jul 2014

Governor of the Bank of England (BoE), Mark Carney, has warned that if rates remain at their current historic low it could contribute to a housing bubble and ‘other risks’.

Speaking at a conference in Glasgow, ahead of the Commonwealth Games, Mr Carney made no definite plans but made it clear that interest rates must rise soon. He said: ‘The clearest indication of when rates will rise is when they rise’.

Rates have been at their 0.5% low since the financial crisis in 2009. Mr Carney added: ‘The Bank is well aware that a prolonged period of historically low interest rates could encourage other risks to develop. In the UK, the biggest risks are associated with the housing market. Echoing comments made in recent weeks, he repeated that household indebtedness was his main concern.

Finishing his speech Mr Carney referenced the ‘enormous pay-offs for hard work, dedication and perseverance’ of competitive runners, saying: ‘Winning the economic marathon will take similar determination’.